Official warns Congress not to force lending

Posted:
Wednesday, March 11, 2009 11:50 AM EDT

WASHINGTON (KWWL) - The official in charge of the Treasury's $700 billion bailout program for the financial sector warns Congress that the government should not force banks to make loans that bankers may deem risky.

Neel Kashkari, the interim assistant secretary for financial stability at Treasury, told a congressional oversight panel Wednesday that bad lending practices were at the root of the financial crisis. He said government directed lending could lead to a return to those practices.

Kashkari, who served under the Bush administration, testified amid growing impatience among members of Congress who want to see evidence that the taxpayer money is actually loosening credit markets.